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"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though!Feel free to comment but keep it respectful, just like they do at council."

Friday, February 22, 2013

The taxman cometh

Things have finally come to a head with
respect to the mayor's charity. The Canada Revenue Agency (CRA) has
notified Trinity Global Foundation that intends to yank its
registered charity status and with it the ability of the “charity”
to issue tax receipts. Since these receipts were grossly inflated,
thanks to the assistance of a tax shelter, Global Learning Gifting
Initiative (GLGI), people with a lot of money could spend a little to
save a lot more. The rest of us bore the brunt of that by paying more
in taxes or receiving less in services.

But the “charity” did well,
assuring donors that they were lucky to be able to do good in the
world and, not only didn't it cost them anything, they actually made
a lot of money through their generosity. It was all perfectly legal.
And, if there were any problems with the taxman, the GLGI legal
department would have their backs.

But now, according to London Free
Press's Chip Martin, Trinity Global is facing the same fate that has
befallen other “charities” working with a tax shelter.
Apparently, CRA is not convinced that everything at Trinity is in
accordance with the rules. It's about to pull the plug. That could
put a damper on the generosity of the donors. No tax receipts? That's
not what they signed on for.

For its part, Trinity is asking CRA to
reconsider. Its lawyer is asking for time for Trinity to put together
a defense of its status. To lose that status now “would result in
immediate unavoidable irreparable harm,” the lawyer claimed.

Surely the board of directors of
Trinity Global saw this coming and could have prepared a case. Back
in November, all but two of them, president Ugo “Joe Jr.” Fontana
and vice-president/secretary/treasurer Patrick Holmes, resigned their
positions although the mayor is still listed as the Chairman of the
board on the Trinity website. So they certainly suspected that
something was in the works.

I hadn't expected Fontana to talk about
the situation. The lawyer who is handling his criminal charges with
respect to fraud, forgery and violating the public trust had coached
him to maintain his silence and he did. I thought he would do
likewise with respect to the CRA. But no, early yesterday afternoon, there
he was in interviews with the Free Press and CTV. It was all captured
on video.

Fontana denied there was any wrongdoing
on his or the charity's part. This was about a difference of
interpretation between Trinity and the CRA. “I sleep well at
night,” he claimed. If so, he must be using some of those
over-valued pharmaceuticals for which donors receive those generous
tax receipts. He certainly didn't look as if he were sleeping well.
He looked harried and defensive.

But he was adamant that all was on the
up and up. They had rigorous rules. They didn't just hand out
receipts holus-bolus. One had only to look at the audited statements
on the website.

Which website he meant wasn't clear. A
look at Trinity's website certainly didn't contain any audited
statement although there was an indication that one would be
available to a donor. The only statements I could find were on the
CRA website. On them, Trinity reported that it had given donations
ranging from $5,000 to $900,000 to ten organizations, the lowest to a
Rotary Club outside Canada and the rest to nine organizations across
the country, organizations already heavily sponsored by various
levels of government. For each listing, the return stated the total
amount of the gift and the portion that was a “gift-in-kind”. For
each organization, the amount of the gift-in-kind was 0. By
deduction, one would conclude that the total gift therefore would be
actual cold hard cash.

But that turned out to be not the case,
as Chip Martin learned when he called one of the “donees” of
Trinity's largesse. According to the report filed with CRA, Trinity
had given Western Area Youth Services (WAYS) $900,000. That
information astounded executive director Brenda Hall. WAYS had only
received some courseware, 200 licences for some software training.
They hadn't even activated a quarter of them. They had been happy to
receive them but certainly hadn't put a dollar value on them.

That courseware had been donated to a
teen centre in Toronto last spring, too, when Trinity made a big splash about opening a Centre of Hope. There was no mention of the
evaluated cost, just that six computers and 1,000 licences to access
online courseware had been donated to a drop in centre for at risk
youth. But if it was anything like the WAYS situation, that might
have amounted to several million dollars. In what universe is an online
tutorial on word processing worth millions of dollars?

WAYS also had not solicited the
donation. It was offered to them by Kristy Taylor, executive director
of a Trinity program, Show Kids You Care. Since that program had been
providing some money to WAYS for snack programs for the past ten
years ($4,300 in 2012), the gift had been accepted when Taylor
introduced it last year. Nobody said anything about a value of
$900,000.

The Show Kids You Care program has an
interesting history. It was previously known as the Children’s
Emergency Fund (CEF), a Toronto-based charity which lost its
charitable status in May 2009 for lending its receipting privileges
to tax shelter promoters, including pharmaceuticals. At that time,
one of the people who headed the organization was none other than
Kristy Taylor. She seems to have learned little from her previous run
in with the CRA. In fact, when the stories about Trinity first
appeared in the London Free Press, she wrote a very strong defence of
the charity, pointing out that it had distributed access to
courseware across the country, including 500 subscriptions for the
Boys and Girls Club in London.

Fontana, too, is unrepentant. In the
interviews, he insists that his work is philanthropic, that his
charity has saved thousands of lives and fed thousands of children.
He doesn't do it directly, he does it by accepting donations of cash
or goods and donating them to other charities that do the work.
That's how a foundation operates, he says.

But, wondered the CTV reporter, how does a
charitable foundation nobody ever heard of operating out of a little office which costs less than $500 a month in rent issue 150 million dollars
dollars of tax receipts?

Fontana didn't have much of an answer. “We
don't sell the programs; we don't promote the programs that others
do. We facilitate the issuance of tax receipts once we have done our
due diligence.” Their statements are audited. They have third party evaluators.

And that's pretty much it.

But a communication from Simple Financial
Management across the street from Trinity Global on York St. Provides
some clarification:

“Tired of paying too much in taxes?” it
asks. “Simple
Foundation Management is very pleased to announce that GLGI has
partnered with Trinity Global Support Foundation, with their office
based out of London, ON, with Hon. Joseph F. Fontana P.C., Chairman
of the Board!!"

It goes on to
invite the recipient and a guest to dinner at a nearby upscale
restaurant and learn how to “eliminate debt, save taxes, protect
your estate, and retire in comfort."

“During
our dinner presentation, we will be featuring strategies on how you
can save on 2011 income taxes!!!” it
gloats.

It's the
same business that ran the Kijiji ad suggesting that for a $500
donation to Trinity Global could net you a $27,000 tax write-off.

If Joe really believed (as he now claims) that TGSF's activities facilitated anything but the hoarding of money by a select few, he would have, and could have, spoken up long ago. Nor would he have threatened lawsuits for that matter.

Most irksome is that it seems Joe is only speaking up now so that he can claim innocence, as if he couldn't have known his intentions could be taken advantage of by greedy people. A brick could have figured it out, but I guess not Joe.

What still remains to be seen is how deep his connections to the vendors of these tax reduction strategies were. Or are. We may never know that, but it would probably be helpful.

Watching Fontana in council gets pretty scary. He is not a good actor so it is easy to see when he is shamelessly pushing hard for some puffed up development project that planning and other staff are advising against. The staff lay out very good reasons for why the project should be held off or changed in some way. But Fontana and Swan shove the good advice aside and jam the motions through anyway. Watch Fontana in action at council and it sure looks like he is working for somebody else and not us. London will be paying for years to come for the stuff that the Fontana eight are sticking us with. Would new people like Denise Brown and Dale Handerson be better and wiser concillors if there were lead by a mayor with more decency and good sense. Maybe they would.

If Fontana gets away with all his money grubbing scandals then there will be no protection for regular people who pay our bills and try to live an honest life. It looks like Fontana thinks we are a bunch of shmucks.

We have to make sure that he never wins another election here in London.

Thanks Gina and others for sticking to this story even after being threatened with a lawsuit. Fontana steals from the poor and gives to the rich. Parasites like him must be purged from public office and sent to jail.

Thanks to all the community members like Gina, Phil, and Chip who stuck to the story after TGF threatened them with a lawsuit. Fontana steals from the poor and gives to the rich! Parasites like him need to be purged from public office and put in jail.

Re Denise Brown, usually she keeps her mouth shut and is thought a fool. The rare times she opens her mouth (libraries causing Blockbuster to close and awarding her son a medal for doing the required 300 volunteer hours), she removes all doubt about being a fool.